China’s state-led finance to overseas projects becomes increasingly important, represents a growing financial trend among emerging market economies, and leads to the puzzle: to what extent are state-owned (policy) bank driven by state or by its own interest. The project compares China’s practice of overseas energy finance with Japan – a well-studied case of state-supported development – to highlight the characteristics of Chinese public financiers and integrate their practice into development theories.
The project speaks to three major development theories: the market model, in which banks pursue profit; the state model, in which banks are commanded by state; and the interest group model, in which conflicting goals clash in the repeating game between stakeholders. The project argues that banks balance their self-interest and state assignments depending on the regulator-bank and bank-client bargains.
In the project, the first research article compiles publicly available data on policy bank loan and calculates the influence of various determinants on loans granted by policy banks. The findings are that Chinese and Japanese banks are driven by both profit and non-market goals and tend to invest in recipients with high risks.
Going beyond large-N statistical modeling, the second article uses archives and interviews to investigate to what extent do investment in risky projects are driven by state goals. The article develops an interest-group bargaining model, in which the analysis focuses on four sets of actors in the process of project formation, crisis emergence, and resolution/or lack of resolution. While projects with innate high risk are often considered as economic diplomacy, evidences suggest the projects are mostly driven by recipient governments and for-profit banks.
The third, and final, research article relies on elite interviews and archival analysis to investigate the domestic politics of policy bank regulation and the formation of loan policies. Between China and Japan, the article formulates two different institutional structures that govern the effectiveness of policy bank regulation. In Japan, the structure is vertical, with paired ministry-bank regulations. In China, the institutional structure is more like umbrella-shaped joint regulation. This leads to more interactions between the leading regulator and banks and occasionally more efficient policy implementation.
| Identifer | oai:union.ndltd.org:bu.edu/oai:open.bu.edu:2144/38789 |
| Date | 12 November 2019 |
| Creators | Jin, Junda |
| Contributors | Ye, Min |
| Source Sets | Boston University |
| Language | en_US |
| Detected Language | English |
| Type | Thesis/Dissertation |
| Rights | Attribution-NonCommercial 4.0 International, http://creativecommons.org/licenses/by-nc/4.0/ |
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